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MAYBANK KIM ENG |
UOB KAYHIAN |
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ASEAN Data Centre ASEAN DC boom – what expert says and investors think
Takeaways from investor meetings/expert call We met 15 investors in Singapore, Malaysia and Australia following our recent deep-dive report on data centres. We also hosted data centre expert Daryl Dunbar (see overleaf for his profile) on an investor call that attended by 120 investors. Investors agree on the growth in data centre demand, but see risk of oversupply, over-announcements that may not hit the ground, a strain on power/water infrastructure and the lack of direct listed data-centre plays. However, Dunbar noted (and our analysis also suggests) risk of oversupply is limited. We believe Singtel, MINT, YTL Power, Sunway Group, Gamuda, Sembcorp Ind, Solarvest, Gulf Energy and CSE Global are key beneficiaries of ASEAN’s data-centre boom.
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Civmec (CVL SP) Multiple Tailwinds From A Potential Improvement In Demand And Currency
Since the announcement of major stimulus measures by China’s central bank on 24 Sep 24, the S&P/ASX 200 Materials Index has rallied by around 8%. The index is made up of major resources companies of Australia, of which many are customers of Civmec. This is positive, as it implies there could be demand for more construction and maintenance services from Civmec’s major customers. The Australian dollar has also strengthened against the Singapore dollar. Maintain BUY with a 6% higher target price of S$1.40.
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UOB KAYHIAN |
UOB KAY HIAN |
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Ping An Insurance Group (2318 HK) 3Q24: Bountiful Harvest After Prolonged Dry Spell.
Ping An delivered robust 3Q24 results with OPAT rising 22% yoy, driven by a strong performance in the life and P&C segments. The asset management business turned red due to impairment but reversal is possible if China’s economy improves further. NBV grew 1.1x in 3Q24, mainly supported by strong life premium growth and margin expansion. Although share price rose 30% mom, the strong earnings turnaround could support further valuation recovery. Maintain BUY. Target price: HK$69.00.
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Zijin Mining (2899 HK) 3Q24: In Line; Mining Entities’ Gross Margin Down 1.2ppt qoq On Lower Copper ASP
Zijin reported 9M24 earnings of Rmb24,357.5m (+50.7% yoy), representing 80% of our full-year estimate and within expectations. Mining entities’ gross margin fell to 58.5% in 3Q24 (-1.2ppt qoq) on lower copper ASP. 9M24 copper/gold output grew to 789,459/54.3 tonnes (+8.3%/+4.7% yoy). The electricity shortage is constraining Kamoa’s copper output, which could result in a 2-4% shortfall to Zijin’s 2024 copper output target. Maintain BUY. Target price: HK$21.90.
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| CGS CIMB | CGS CIMB |
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Riverstone Holdings 2H24F: Headwinds from strengthening RM
■ We preview 3Q24F net profit at RM69m (-5% qoq), as we think sharp appreciation of RM against the US$ could pressure margins in 2H24F. ■ US’s impending tariff hike on Chinese gloves could benefit RSTON’s generic gloves sales in sFY25F, but EPS impact likely muted due to lower unit profit. ■ Reiterate Hold with an unchanged TP of S$0.95 as we see FY24F earnings risks from US$/RM currency movements.
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Singapore Airlines 2Q preview: gradual downdrift to continue
■ SIA may report PATAMI of c.S$400m-430m in 2QFY25F, with 1H PATAMI broadly in-line 51% of our full-year forecast (but below certain analysts). ■ Passenger yields likely continued to trend lower due to more competition, albeit partly offset by higher cargo demand and yields, and lower oil prices. ■ Reiterate Reduce as we expect SIA to continue experiencing a downdrift in earnings, with S$5.88 TP (CY24F P/BV of 1.1x, +1 s.d. from 2011 mean).
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